New study by Cisco suggests the need to include net neutrality exemptions for medical and industrial traffic

A report from top networking equipment OEM Cisco Systems Inc. (CSCO) gives a rare expert look at the scope of the internet and precisely how much data we're using today. In the process it raises some thorny issues including the questions of net neutrality, connected medical equipment, and the lack of competition in the American internet services marketplace.

I. To Boldly go Where the Internet Has Never Gone Before

Overall mankind is using an unprecedented amount of internet traffic, globally. From 1984 to 2013 mankind used approximately 1.3 zettabytes (1 zettabyte is a trillion gigabytes) of web traffic. By 2018, Cisco predicts that some will be used yearly, with roughly 132 exabytes of monthly web traffic.

[Image Source: Cisco]

Currently, monthly web traffic is at 62 exabytes a month, or roughly 0.7256 zettabytes of traffic a year. In other words this year we will use over half as much data as was used in the entire history of the web, prior to this year.

Globally an individual now uses 15 gigabytes of traffic a year, while a household uses 36 gigabytes. Those totals are expected to double by 2018, and in the more distant future grow by up to a factor of five.

[Image Source: Cisco]

The explosive growth in web traffic is creating some major opportunities for inequity and price gouging, as well as some tough societal questions.

II. When the Needs of the Many Outweigh the Needs of the One

One of the biggest trouble spots is internet content (music, video, etc.). The issues facing the industry are most severe when it comes to video content, the most data intensive type of internet consumable.

The report says that video traffic currently accounts for over three-quarters of America's consumed internet bandwidth (78 percent, to be precise). It predicts that by 2018, 84 percent of U.S. internet traffic will be dedicated to video traffic.

Video traffic is the source of much of the internet's traffic. [Image Source: Cisco]

On the horizon is an even more tempting model of triple-dipping. In such a scheme not only is the customer charged a connection fee and the content provider a "fast lane" fee, but then the customer must also pay individual charges in order to access "non-preferred" services. Such a scheme could ultimately lead to an ISP pocketing as much as a dollar per YouTube video viewed, or several dollars for viewing a Netflix video. An industry trade group presentation from 2010 suggested such a possibility.

Second, aside from redundant fees increasing cost to consumers and content providers, there's also the issue of so-called "data discrimination" -- a service provider playing content provider and deliberately damaging its rivals' (e.g. YouTube, Netflix) offerings. This is indeed something to watch, as Comcast and Time Warner are both in the content business, as is Bright House Networks, another top U.S. ISP. Even seemingly independent players like Verizon Communications Inc. (VZ) have signed collusive deals with Comcast to bring customers exclusive content. Such deals could quickly become arrangements to discriminate against competitors' traffic.

II. When the Needs of the One Outweigh the Needs of the Many

But a problem is that there's also a growing need to allow some forms of data discrimination. With medical equipment increasingly being internet-aware, prioritizing the speed of certain connected machines -- often referred to as the "internet of things" -- could literally be a life and death necessity.

Currently 21 billion devices are connected to the internet, and that total is on the rise.

Withings is among the innovators in the field of connected medical devices, producing wireless blood pressure monitoring cuffs.

Cisco government and community relations VP Jeff Campbell toldReuters in an interview:

A world in which we want networks to treat all traffic the same will inhibit these connections. As the FCC looks at rewriting its net neutrality rules, it is important that we allow for things like managed services and specialized services that can provide new applications for consumers.

Cisco estimates that globally, connected machines currently account for 25 percent -- or roughly a quarter of total global web traffic. That percentage is expected to rise to 46 percent by 2018.

In other regions that consume less HD video content than the U.S., this increase is less of a cause for concern. But in the U.S., Cisco's study suggests we may soon be encountering a scenario where life-saving information has to compete with entertainment content -- streaming video and music -- for bandwidth.

At the same time, many of the data discrimination issues that manifest regarding streamed content could become even more deleterious when it comes to connected medical and industrial equipment. Realizing that their customer is between a rock and a hard place, ISPs could look to gouge the medical, power grid, and manufacturing industries with extra "prioritization fees".

It may be time to redefine what a "common carrier" is, extending that definition to ISPs and wireless networks -- service providers that are today more dominant than the entities legal defined as "common carriers" (telephone networks). It is highly questionable to suggest that ISPs should still be afforded this special status that was given to them when they were nascent startups.

Today, with empire in hand, the FCC must consider the tough task of going to war with ISPs to redefine their regulatory status to being considered common carriers. At the same time, as the Cisco report indicates, it must tread lightly when it comes to providing proper exceptions for infrastructure and medical traffic.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007